EXHIBIT 99.1
MEDIA CONTACTS: INVESTOR CONTACT:
Julie Kim/ Roger Villareal Billie Anderson
Weber Shandwick Peet's Coffee & Tea, Inc.
415.248.3419/415.248.3425 510.594.2100
jkim@webershandwick.com banderson@peets.com
rvillareal@webershandwick.com
PEET'S COFFEE & TEA, INC. REPORTS THIRD QUARTER 2003 RESULTS
EMERYVILLE, Calif. - October 29, 2003 - Peet's Coffee & Tea, Inc. (NASDAQ:PEET),
today announced third quarter results for the 13 week period ending September
28, 2003.
Total Company revenue for the quarter increased 13.7 percent to $28.8 million,
compared to $25.4 million for the same period last year. Year-to-date sales
increased to $85.3 million for the 39 weeks ending September 28, 2003, an
increase of 14.2 percent over sales of $74.7 million for the same period last
year.
Retail Store revenue increased 10.7 percent to $20.7 million for the quarter.
Three new stores opened during the quarter bringing the total openings for the
year to seven. The retail business also continues to benefit from the redesign
of the beverage menu late in the second quarter, which has improved drink sales.
Year-to-date Retail Store revenue increased 8.5 percent to $61.8 million
primarily driven by the twelve new stores we have added in the last fourteen
months.
Specialty Sales revenue increased 22 percent to $8.1 million for the quarter.
Within Specialty, the grocery business continues to grow most rapidly, up 57
percent over last year, despite comparison to the initial pipeline load-in for
the introduction into 1,200 Safeway stores in the third quarter of last year.
This quarter, an additional 530 grocery distribution points were added, bringing
the total to 2,630 at the end of the quarter. The foodservice business also
registered a healthy 49 percent growth benefiting from new customers added
earlier in the year and late last year. Direct delivery sales were up 6
percent, and the office business grew 2 percent during the quarter.
Year-to-date, Specialty Sales revenue increased 32.6 percent to $23.5 million.
For the quarter, Peet's recorded a loss of $0.3 million, or $0.03 per share,
which includes a charge of $3.4 million ($2.1 million after tax, or $0.16 per
share). This previously announced charge was primarily due to an agreement in
principle to settle a purported class action overtime lawsuit commonly brought
against companies with retail operations in California, and, secondarily, due to
key executive severance payments. For the third quarter of 2002, net income was
$1.3 million, or $0.10 per share. Without this charge, net income would have
been $1.8 million, up 39 percent over last year, equal to analysts' consensus
estimates.
Year-to-date net income was $2.5 million, or $0.19 per share, compared to $2.5
million, or $0.22 per share last year. Excluding the charge, net income was
$4.6 million, up 85 percent over last year.
"Aside from these charges, we're pleased with our third quarter earnings and
sales performance. While we are disappointed in having to settle this overtime
litigation, we believe it is in the best interest of the Company and our
shareholders to put this one-time matter behind us and move on," said Patrick
O'Dea, president and chief executive officer, Peet's Coffee & Tea, Inc. "I am
optimistic about our future prospects as we continue to build an organization
that will enable us to grow at an even more rapid rate into the future."
PEET'S COFFEE & TEA, INC. Q3 2003 CONFERENCE CALL
The Company will report its third quarter 2003 results via conference call on
Wednesday, October 29, 2003, at which time the Company will also provide 2003
fourth quarter and year-end guidance, as well as 2004 sales and earnings
guidance. The teleconference call will begin at 2:00 p.m. PDT/5:00 p.m. EDT. The
call will be simultaneously webcast with accompanying slides on Peet's Web site
at www.peets.com.
The teleconference can be accessed by calling 1-800-361-0912. A replay of the
teleconference will be available at 5 p.m. PDT/8 p.m. EDT at 1-888-203-1112,
using access code 371665. The recording will be archived through midnight EDT on
November 5, 2003. It will also be available at http://investor.peets.com through
October 29, 2004.
ABOUT PEET'S COFFEE & TEA, INC.
Founded in Berkeley, Calif. in 1966, Peet's Coffee & Tea, Inc. is a specialty
coffee roaster and marketer of fresh, deep-roasted whole bean coffee for home
and office enjoyment. Peet's fresh-roasted coffee, hand-selected tea and
related items are sold in several distribution channels including specialty
grocery and gourmet food stores, online and mail order, office and restaurant
accounts and 72 company-owned stores in six states. Peet's is committed to
strategically growing its business and to maintaining a unique culture and focus
on customer satisfaction. For information about Peet's Coffee & Tea, Inc.,
visit www.peets.com or call 1-800-999-2132. Peet's Coffee & Tea, Inc. shares
are traded under the symbol PEET.
###
This press release contains statements that are not based on historical fact and
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, including those relating to the agreement in
principle to settle the overtime litigation. Because of the uncertainties
inherent in these forward-looking statements, the Company's actual results could
differ materially from those set forth in forward-looking statements. The
Company's estimates regarding its operations and financial results are based on
currently available operating, financial and competitive information. Actual
future results and trends may differ materially depending on a variety of
factors including but not limited to, risks arising from accounting adjustments;
the court's approval of the settlement of the overtime litigation; the Company's
ability to implement its business strategy, attract and retain customers, and
obtain and expand its market presence in new geographic regions; the
availability and cost of high quality Arabica coffee beans; consumers' tastes
and preferences; and competition in its market as well as other risk factors as
described more fully in the Company's filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended December
29, 2002.
..
Peet's Coffee & Tea, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Thirteen Thirteen Thirty-nine Thirty-nine
weeks ended weeks ended weeks ended weeks ended
09/28/2003 09/29/2002 09/28/2003 09/29/2002
Retail stores. . . . . . . . . . . . . . . . . . . . . . $ 20,706 $ 18,702 $ 61,794 $ 56,975
Specialty sales. . . . . . . . . . . . . . . . . . . . . 8,127 6,664 23,517 17,736
------------- ------------- ------------- -------------
NET REVENUE. . . . . . . . . . . . . . . . . . . . . . . 28,833 25,366 85,311 74,711
COGS & related occupancy expenses. . . . . . . . . . . . 13,308 11,651 39,297 34,719
Operating expenses . . . . . . . . . . . . . . . . . . . 9,426 8,182 28,183 24,100
Marketing & advertising expenses . . . . . . . . . . . . 958 1,161 3,357 3,431
General & administrative expenses. . . . . . . . . . . . 4,860 1,403 7,722 5,434
Depreciation & amortization expenses . . . . . . . . . . 1,228 1,160 3,547 3,390
------------- ------------- ------------- -------------
Total operating cost & expenses . . . . . . . . . . 29,780 23,557 82,106 71,074
OPERATING INCOME (LOSS). . . . . . . . . . . . . . . . . (947) 1,809 3,205 3,637
Investment income, net . . . . . . . . . . . . . . . . . (499) (220) (972) (307)
------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE INCOME TAX. . . . . . . . . . . . . (448) 2,029 4,177 3,944
Income tax provision (benefit) . . . . . . . . . . . . . (125) 750 1,679 1,459
------------- ------------- ------------- -------------
NET INCOME (LOSS). . . . . . . . . . . . . . . . . . . . $ (323) $ 1,279 $ 2,498 $ 2,485
============= ============= ============= =============
NET INCOME (LOSS) PER SHARE:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.03) $ 0.11 $ 0.20 $ 0.24
Diluted (1). . . . . . . . . . . . . . . . . . . . . . . $ (0.03) $ 0.10 $ 0.19 $ 0.22
SHARES USED IN CALCULATING NET INCOME (LOSS) PER SHARE:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . 12,778 11,992 12,472 10,541
Diluted (1). . . . . . . . . . . . . . . . . . . . . . . 12,778 12,673 13,155 11,272
(1) As a result of the net loss for the third quarter of 2003, potential common
shares in the diluted computation would be antidilutive and are therefore
excluded. As a result, shares used in computing basic and diluted net loss per
common share are the same for the quarter.
Peet's Coffee & Tea, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 28, 2003 December 29, 2002 September 29, 2002
ASSETS
Current Assets
Cash & cash equivalents . . . . . . . . . . . $ 27,175 $ 19,672 $ 17,472
Accounts receivable . . . . . . . . . . . . . 2,831 2,210 1,624
Income tax receivable . . . . . . . . . . . . 300 1,117 -
Inventories . . . . . . . . . . . . . . . . . 13,058 11,007 11,017
Prepaid expenses and other. . . . . . . . . . 3,710 1,803 1,615
------------------- ------------------ -------------------
Total Current Assets . . . . . . . . . . 47,074 35,809 31,728
Property and equipment, net . . . . . . . . . 31,860 27,929 24,903
Deferred income taxes . . . . . . . . . . . . - - 941
Intangibles and other assets, net . . . . . . 2,962 3,305 3,565
Long-term U.S. government securities. . . . . 24,956 28,102 27,863
------------------- ------------------ -------------------
Total Assets . . . . . . . . . . . . . . $ 106,852 $ 95,145 $ 89,000
=================== ================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable. . . . . . . . . . . . . . . $ 4,963 $ 6,463 $ 5,498
Accrued compensation and benefits . . . . . . 3,875 3,741 2,536
Other accrued liabilities . . . . . . . . . . 5,240 2,638 2,780
Current portion of long-term borrowings . . . 444 468 487
------------------- ------------------ -------------------
Total Current Liabilities. . . . . . . . 14,522 13,310 11,301
Long-term borrowings, less current portion. . 90 424 535
Deferred income taxes . . . . . . . . . . . . 32 181 -
Deferred lease credits. . . . . . . . . . . . 828 726 705
------------------- ------------------ -------------------
Total Liabilities. . . . . . . . . . . . 15,472 14,641 12,541
------------------- ------------------ -------------------
Shareholders' Equity
Common stock. . . . . . . . . . . . . . . . . 86,621 78,014 76,244
Other comprehensive income. . . . . . . . . . 36 265 162
Retained earnings . . . . . . . . . . . . . . 4,723 2,225 53
------------------- ------------------ -------------------
Total Shareholders' Equity . . . . . . . 91,380 80,504 76,459
------------------- ------------------ -------------------
Total Liabilities & Shareholders' Equity $ 106,852 $ 95,145 $ 89,000
=================== ================== ===================
Peet's Coffee & Tea, Inc.
Reconciliation of Net Income (Loss) excluding Special Charges
(Unaudited, in thousands, except per share data)
The following reconciliation of net income (loss) is provided to assist the reader with understanding the financial
impact of the litigation settlement and severance charges during the quarter and the year. Management believes this
information is relevant because the magnitude of the charges do not reflect our on-going operating performance.
Thirteen weeks ended Thirty-nine weeks ended
-------------------- -----------------------
Sept. 28, 2003 Sept. 29, 2002 Sept. 28, 2003 Sept. 29, 2002
---------------- --------------- ---------------- ---------------
Net income (loss) as reported . . . . . . . . $ (323) $ 1,279 $ 2,498 $ 2,485
Litigation settlement and severance charge. . 3,367 0 3,367 0
Income tax benefit. . . . . . . . . . . . . . (1,265) 0 (1,265) 0
---------------- --------------- ---------------- ---------------
Net income, excluding charges . . . . . . . . $ 1,779 $ 1,279 $ 4,600 $ 2,485
================ =============== ================ ===============
After tax impact of litigation and severance. $ 2,102 $ 2,102
Basic net income (loss) per share:
Net income (loss), as reported. . . . . . . . $ (0.03) $ 0.11 $ 0.20 $ 0.24
Litigation settlement and severance charge. . 0.26 0.00 0.27 0.00
Income tax benefit. . . . . . . . . . . . . . (0.10) 0.00 (0.10) 0.00
---------------- --------------- ---------------- ---------------
Basic net income, excluding charges*. . . . . $ 0.14 $ 0.11 $ 0.37 $ 0.24
================ =============== ================ ===============
Diluted net income (loss) per share: (2)
Net income (loss), as reported. . . . . . . . $ (0.03) $ 0.10 $ 0.19 $ 0.22
Litigation settlement and severance charge. . 0.25 0.00 0.26 0.00
Income tax benefit. . . . . . . . . . . . . . (0.09) 0.00 (0.10) 0.00
---------------- --------------- ---------------- ---------------
Diluted net income, excluding charges . . . . $ 0.13 $ 0.10 $ 0.35 $ 0.22
================ =============== ================ ===============
After tax impact of litigation and severance. $ 0.16 $ 0.16
(2) Shares used in calculating diluted net income per share for the quarter and
year to date are 13,544 and 13,155, respectively, and include the dilution of
common share equivalents.
* per share data may not sum due to rounding